A home is the single largest purchase most people ever make, but if you’re a newbie to real estate transactions, it can also be one of the most confusing. With so much money on the table, it
6 Most Essential Home Buying Tips
Buying a house can be an exciting and emotional process. Before you start your home search, though, you’ll want to understand the ins and outs of the homebuying process. This will help empower you to make decisions that are the best for your family — and your wallet.
Here are the 6 most essential home buying tips:
1. Get a home inspection. This will evaulate the safety and overall condition of the home. Remember, an inspector doesn’t investigate all aspects of a home, so it’s helpful to look at a home inspection checklist to see what is and isn’t covered. As a buyer, you’re responsible for paying the home inspector, and while the fees can vary, you’ll pay an average of $300 to $450. The home inspection will help you figure out how to proceed with the closing process. You might ask the seller for repairs, decide to back out of the deal if you have a contingency in the contract, or simply anticipate future repairs after moving in.
2. Get pre-approved for a mortgage loan. (before you start looking) Getting pre-approved for a mortgage is proof that a lender will loan you a certain amount for a home. It’s also helpful when you make an offer on a house, and it gives you a firmer handle on how much you can afford. This is where working with an experienced lender is crucial; your lender can walk you through all of the options and overall costs. Be certain to ask what first-time homebuyer programs or other incentives are available to you.
3. Hire a Professional Real Estate Agent. An experienced real estate agent can be the key to help you find your dream home and negotiate with the seller on your behalf. This person should be on your side, helping you make informed decisions and refer you to other professionals like home inspectors, contractors (if needed), appraisers and title companies.
4. Negotiate Repairs. Your agent can help you with negotiating any repairs — either the seller oversees the repairs, or you can ask for a cash-back credit at closing and handle them yourself. Some sellers may not agree to extensive repairs, and that’s why a home inspection contingency is a good idea to give you a way out of the purchase if the home is in less-than-ideal shape. You might not have the budget or desire to handle those repairs after buying the home.
5. Create a Housing Budget. A housing budget starts with understanding the maximum loan amount you qualify for. Next, you have to see what the monthly mortgage payment adds up to — and whether your budget can handle it. Lenders don’t take into account monthly bills such as day care, tuition, utilities, groceries and other financial obligations, so it’s up to you to crunch numbers and decide what monthly payment you can comfortably afford. It's recommended for a buyer to save $15,000-$25,000, in addition to their down payment, to cover closing costs or any emergency maintenance that may arise after you close.
6. Have Realistic Wish List. Using your housing budget, come up with a realistic "wish" list for your new home. This includes neighborhood location, number of bedrooms, house size and other amenities. This list will assist your real estate agent in finding you the home of your dreams that fits into your budget.
You are now ready to take action! Buying a home involves a lot of moving parts and complex steps, but these tips, along with the expertise of your real estate agent and lender, can help you navigate the process smoothly. Don’t be afraid to ask questions along the way and learn as much as you can before diving in. By doing your homework ahead of time, you’ll have more confidence in your decision and relish getting those coveted house keys on closing day.